Let’s start with two projections: 1) the U.S. economy is expected to have a CAGR of 3.3% for the next couple of years; and 2) the U.S. economy is expected to have a core inflation rate of 2.9% (core removes food and fuel inflation, which you might think is a bit like your monthly budget minus home and car payments, but it isn’t…much anyway). There is a wee bit of growth built into the economy: 0.4%.
It’s kind of a “low-resolution” way to look at the economy, but there is some logic to it. In fact, metal fabricating’s CAGR 2024-2030 is 4.7%, 1.4% better than the U.S. economy and 1.8% better than U.S. inflation. However, most fabricators specialize in one or several markets, and it may be time to look once again at the expected performance in a sampling of these markets that deal with making metal things. Let’s cover them in ascending level of expectations.
Auto
The news has not been good for the automobile and light truck market. Is recovery on the way? Different economic research firms have slightly different takes, but most say that for the next two years CAGR will be 1%-2.5%. However, some see huge growth thereafter, ranging from 10.6% and higher, and ending in 2033 or 2034. Why the change? Probably expected lower interest rates combined with good employment news.
Research leader Gartner says some plants may be at risk in the U.S. and Europe, the latter trying to comply with aggressive emissions targets. Potential mergers (whispers of a Honda-Nissan deal) loom as well.
Metal Furniture
Still in a strong position, durable particularly in commercial environments, and growing faster than the econmy, metal furniture has a CAGR of between 3.6 and 4.7%, depending on which research agency has your trust.
Construction
Construction has a CAGR to 2028 of 4.7%. It is amazing to note that the construction marketplace will grow to more than $2 trillion by then.
Appliances
It’s the nature of the beast: great times in the world of appliances can mean either new, exciting technologies or recovery from major natural disasters. Averaging all things, prognosticators say this market will rise at a CAGR of 4.87%, slightly more than metal fabricating’s average.
Agriculture equipment
If you supply to Deere, Case, Caterpillar, New Holland, etc., expect that the growth will be decent at 5.3% CAGR up to 2030.
Aerospace/defense
People think of California when they hear this category, and California is a leading home of aerospace. However, it’s spread through the 50 states with significant pockets like Kansas, Arizona, and Ohio. It is almost a trillion-dollar industry, and healthy, with a CAGR of 5.76%.
Now we get to some markets with high expectations.
Medical devices
Why shouldn’t there be growth? The growth is led by wearable solutions; think of insulin pumps and their variants; heart monitors that are patches, and other devices that mimic some of the Apple Watch functionality (or is that the other way around?). Plus, Baby Boomers. ERs that bristle with machines that monitor us if we get hurt or become ill. Steady, solid growth at 9.8% CAGR up to 2032, when the market will be $315 billion strong.
Electrical/Electronic equipment
Housings, frames, enclosures, fixtures, vents—there are so many things that go into making an electrical or electronic product. And if that is your chosen vertical market (or one of them), you are going to enjoy participating in a market that will grow anywhere from 7.9-11.7% CAGR (the estimates vary greatly).
Renewable energy equipment
If you think of the equipment necessary in renewable energy, immediately you might think of wind towers, bumping plate with oversized press brakes, loading semis with huge, welded pieces. Or maybe you’re thinking about solar power, with the panels, and more important to us, their supports and framework. All these things and more (e.g. battery cabinets) are involved. If you happen to be in this vertical market, congratulations, the industry predictions range from 12.9% to 16-17% CAGR, growing to an astounding $4.394 trillion by 2034. There’s room for more fabricators.